WASHINGTON-“The Telecom Act was an act of Congress and not an act of God, so it will not be immediately perfect,” commented AT&T’s Chairman and Chief Executive Officer Robert Allen on the first anniversary last week of the landmark piece of 1996 legislation. “Telecom still is a huge monopoly run by the regional holding companies and by GTE (Corp.)”
However, he said, competition is beginning, and 40 million communications users will change carriers sometime this year.
“I am a reformed monopolist,” Allen admitted. “There is nothing inherently evil about those who want to compete.”
This attitude is a complete turnaround from his opinion prior to the days of divestiture, when he thought that any change in communications provision would have meant “the end of western civilization as we know it.”
But Allen, who will be retiring from AT&T Jan. 1, believes that those local exchange carriers that want to crack the long-distance marketplace in reality “are more interested in circling the wagons. RHCs are talking merger rather than competition, and interexchange carriers are merging with foreign carriers. None of this bodes well for competition.”
In touting his company’s near-future vision to provide one-stop voice and data communications, Allen went out on a limb by promising that where AT&T can provide long-distance, local and other communications services-including wireless-the package would cost less than each service would cost individually. He also vowed to pass on any savings in access charges AT&T gains as a result of an ongoing regulatory overhaul of such rates.
While pointing to the continued growth of its core long-distance business and the upcoming local-exchange opportunities, Allen mentioned that wireless communications would be a “very important part of our future,” and that he has been pleased with its success so far and predicts a new growth spurt in global systems.
“We’ve made significant investments in wireless services globally,” he said.
Because many of those systems require the participation of a foreign carrier, i.e., Sprint and France Telecom/Deutsche Telekom and MCI and British Telecom, Allen agrees with the Justice Department’s approval of the MCI/BT merger, which will allow MCI’s U.S. cellular and/or personal communications services customers access to wireless in most European venues in the future.
He has a different view, however, about the pending Sprint/France Telecom/Deutsche Telekom partnership, saying that France and Germany are not yet open markets, although they will be required to loosen up by his retirement date. “I’ll believe it when I see it,” he said. Such partnerships “are not in the American consumers’ interests when other markets are not reciprocal.”
Allen also mentioned that AT&T is on the verge of announcing new wireless local exchange initiatives but is waiting until it can make such services cost-effective.
“Quality isn’t the question; we’re working on the costs,” he said. “There could be an announcement in a few months.”
And what will AT&T as a whole look like in 2005, long after his departure from the giant?
“No question, it will be different. We’ll still be an end-to-end provider, maybe adding entertainment,” Allen prognosticated.
“Consumers want the old Bell system in some form, like for one-stop shopping. We’ll probably look like we did before divestiture except not as large or as fat,” he said.
